INSIGHTS
OCT
8
WEEK AHEAD...
Before we look ahead to this week’s economic picture it might be a good time to reflect on last week.
We witnessed two events that could have some serious implications on the election on November 6th: The debate on Wednesday and the drop in the U.S. Unemployment rate.
First things first: The debate no matter how you slice it was a win for Mitt Romney. If you are some right leaning media outlet, Romney destroyed the President with his knowledge and forthright answers to every question. The president looked lost and never regrouped enough to make a positive impact.
If you are the liberal media, the President comported himself beautifully and Mr. Romney did not have a clear grasp of the facts.
It is typical of the divisive nature of the Country’s political system to have such a divergence of opinion.
If you saw the debate you should come to your own conclusion about the winner and act accordingly.
As for me, it didn’t sway me either way and I am voting for the man I believe will be able to lead this country the best in the next four years.
Now those Unemployment numbers. Jack Welch pretty much said it on Friday. Are you kidding me? To paraphrase him on Twitter.
Lets get this straight: We have had something like 47 continuous months of unemployment over 8%. No sitting president has ever been re-elected with unemployment of 8% or higher. The president lost the debate no matter what channel or newspaper you read. Unemployment comes in at 7.8%.
Now I am not a conspiracy theorist nor do I believe in coincidences when it comes to politics, but I do see something a little fishy here.
Granted, the economy is getting better and firms are starting to hire slowly but is that strength enough to warrant such a positive move? I tend to doubt it.
The methodology hasn’t changed so why have they moved suddenly and with such impact? Someday I would love the NY Times or the Washington Post tackle this one.
By the way, you won’t hear much about this in a week, only that unemployment is under 8% under Obama’s leadership.
Now this week:
First and foremost, will be earnings. Used to be a time when Alcoa’s (AA) earnings would be significant, not only because they are the first major company to report but they were also a pretty good indicator of the economy’s health. The company’s relevance has lessoned over the years as the manufacturing sector went largely offshore and we became a more service-based economy. However, They are the first company to report and traditionally the discussion starts with them. I don’t think we will see any surprises from them. They are usually fairly accurate with their estimates and most analysts are spot on with their estimates. So what companies will we be watching? This week, Chevron (CVX), Yum Brands (YUM), Costco (COST), and Safeway Stores (SWY) are just a few of the over 200 names that will be announcing.
We have seen a plethora of companies dial back their earnings for the third quarter and the expectations are already low. I do think you will see a much larger percentage of companies beat the street estimates than we normally see. This can only bode well for the market short term and the economy longer term.
There are a couple of key data points that will reconfirm my belief that the economy is moving in a positive direction. On Tuesday, the NFIB Small Business Optimism index will be released. This normally is not considered a key talking point but with the emphasis on the health of small businesses and their impact on hiring, I think it bears some closer scrutiny. Then we have Jobless Claims which we will see improvement in and then on Friday, the PPI and Consumer Sentiment. Two indices that are probably moving in different directions. PPI has been climbing and that underscores a possible threat to this low inflation environment we have been living through and the Consumer Sentiment index should be getting better.
We witnessed two events that could have some serious implications on the election on November 6th: The debate on Wednesday and the drop in the U.S. Unemployment rate.
First things first: The debate no matter how you slice it was a win for Mitt Romney. If you are some right leaning media outlet, Romney destroyed the President with his knowledge and forthright answers to every question. The president looked lost and never regrouped enough to make a positive impact.
If you are the liberal media, the President comported himself beautifully and Mr. Romney did not have a clear grasp of the facts.
It is typical of the divisive nature of the Country’s political system to have such a divergence of opinion.
If you saw the debate you should come to your own conclusion about the winner and act accordingly.
As for me, it didn’t sway me either way and I am voting for the man I believe will be able to lead this country the best in the next four years.
Now those Unemployment numbers. Jack Welch pretty much said it on Friday. Are you kidding me? To paraphrase him on Twitter.
Lets get this straight: We have had something like 47 continuous months of unemployment over 8%. No sitting president has ever been re-elected with unemployment of 8% or higher. The president lost the debate no matter what channel or newspaper you read. Unemployment comes in at 7.8%.
Now I am not a conspiracy theorist nor do I believe in coincidences when it comes to politics, but I do see something a little fishy here.
Granted, the economy is getting better and firms are starting to hire slowly but is that strength enough to warrant such a positive move? I tend to doubt it.
The methodology hasn’t changed so why have they moved suddenly and with such impact? Someday I would love the NY Times or the Washington Post tackle this one.
By the way, you won’t hear much about this in a week, only that unemployment is under 8% under Obama’s leadership.
Now this week:
First and foremost, will be earnings. Used to be a time when Alcoa’s (AA) earnings would be significant, not only because they are the first major company to report but they were also a pretty good indicator of the economy’s health. The company’s relevance has lessoned over the years as the manufacturing sector went largely offshore and we became a more service-based economy. However, They are the first company to report and traditionally the discussion starts with them. I don’t think we will see any surprises from them. They are usually fairly accurate with their estimates and most analysts are spot on with their estimates. So what companies will we be watching? This week, Chevron (CVX), Yum Brands (YUM), Costco (COST), and Safeway Stores (SWY) are just a few of the over 200 names that will be announcing.
We have seen a plethora of companies dial back their earnings for the third quarter and the expectations are already low. I do think you will see a much larger percentage of companies beat the street estimates than we normally see. This can only bode well for the market short term and the economy longer term.
There are a couple of key data points that will reconfirm my belief that the economy is moving in a positive direction. On Tuesday, the NFIB Small Business Optimism index will be released. This normally is not considered a key talking point but with the emphasis on the health of small businesses and their impact on hiring, I think it bears some closer scrutiny. Then we have Jobless Claims which we will see improvement in and then on Friday, the PPI and Consumer Sentiment. Two indices that are probably moving in different directions. PPI has been climbing and that underscores a possible threat to this low inflation environment we have been living through and the Consumer Sentiment index should be getting better.